Tax Trims - Income Tax, GST, Incorporation & Trademarks

# Re-validation Under Sections 12A and 80G :

Time Taken :

The overall process may take up to three months, where the application shall be made within 1 week from the date of submission of documents. It holds a 5-year validity and requires renewal every 5 years.

$ Documents Required :

@

Registered trust deed/society registration certificate/incorporation certificate
@

Self-certified copies of audited annual accounts for the preceding three financial years
@

NGO DARPAN ID (if receiving government grants)
@

FCRA ID (if receiving foreign donations)
@

Self-certified copy of the certification previously obtained under 12A and 80G
@

The interest rate charged by banks for MSME registered enterprises is lower than the normal interest rate
@

A note on the activities of the applicant.

# Registration Under 12A :

As registration under Section 12A is for tax exemption, an NGO which has not registered under this cannot enjoy the privilege of tax exemption and would have to pay taxes just as any normal registered company would during the year.

# How to Register Under Section 12A :

All charitable trusts, societies, and Section 8 Companies, except private or family trusts, are eligible to register under Section 12A. But, before registration under 12A and 80G, an NGO has to first register with NGO Darpan, a register maintained by the Government of India, and then be registered under the Income Tax Act (This is not compulsory, it is an option available to trusts. A charitable organisation without Darpan can also apply for 12A and 80G) by following the steps mentioned below.

# Steps :

1

An application has to be filed in Form 10A with the Commissioner of Income Tax - Exemption
2

The required documents need to be submitted
3

Once the documents are submitted, the application will be reviewed by the Commissioner, who might ask for additional information
4

If everything is found to be satisfactory, the registration will be completed soon after, else it will be rejected.

# Registration Under 80G :

As per Section 80G of the Income Tax Act, if an NGO gets an 80G certification then it’s donors will be allowed to reduce the amount of donation made from its total Income (proportion of deduction allowed depends on the type of organisation), thus being incentivised to contribute some part of their disposable income towards good causes.

# How to Register Under Section 80G :

Any NGO that wants to register under Section 80G has to be duly registered and should be working specifically towards charitable objectives.

Steps :

1. An application has to be filed in Form 10A with the Commissioner of Income Tax – Exemption.

2. Important documents are to be submitted

3. Upon submission, the documents would be reviewed by the Commissioner. If required, he may ask for additional documents or information and the same have to be provided within the timeframe to avoid rejection

# Benefits :

• 80G certification enhances the prospects and credibility of any organisation

• Donors reap the benefits of less taxable incomes

• Possibility of attracting more donors

• Eligibility to get government funds

• NGO owners can seek foreign contributions without many hassles

New terms of Registration and Re-registration under Section 80G and 12A :

• Newly established trusts applying for income tax registration will be given provisional registration for three years. It becomes due for renewal either upon commencement of activities or upon completion of 3 years.

• For Re-Registration, the tenure will be revalidated by income tax authorities for a period of 5 years and renewal will fall due upon completion of 5 years.

SEC 80G & SEC 12A

# Re-validation Under Sections 12A and 80G :

Time Taken :

The overall process may take up to three months, where the application shall be made within 1 week from the date of submission of documents. It holds a 5-year validity and requires renewal every 5 years.

$ Documents Required :

Registered trust deed/society registration certificate/incorporation certificate

Self-certified copies of audited annual accounts for the preceding three financial years

NGO DARPAN ID (if receiving government grants)

FCRA ID (if receiving foreign donations)

Self-certified copy of the certification previously obtained under 12A and 80G

The interest rate charged by banks for MSME registered enterprises is lower than the normal interest rate

A note on the activities of the applicant.

# Registration Under 12A :

As registration under Section 12A is for tax exemption, an NGO which has not registered under this cannot enjoy the privilege of tax exemption and would have to pay taxes just as any normal registered company would during the year.

# How to Register Under Section 12A :

# Steps :

An application has to be filed in Form 10A with the Commissioner of Income Tax - Exemption

The required documents need to be submitted

Once the documents are submitted, the application will be reviewed by the Commissioner, who might ask for additional information

If everything is found to be satisfactory, the registration will be completed soon after, else it will be rejected.

# Benefits :

Provision to gain grants from governments and international organisations.

Registration certificate serves as valid proof of the purpose of the NGO and its operations.

All NGOs, be they trusts, companies, or societies, are eligible to avail exclusion from taxes

FCRA registration benefits.

# Registration Under 80G :

# How to Register Under Section 80G :

Any NGO that wants to register under Section 80G has to be duly registered and should be working specifically towards charitable objectives.

Steps :

1. An application has to be filed in Form 10A with the Commissioner of Income Tax – Exemption.

2. Important documents are to be submitted

3. Upon submission, the documents would be reviewed by the Commissioner. If required, he may ask for additional documents or information and the same have to be provided within the timeframe to avoid rejection

# Benefits :

• 80G certification enhances the prospects and credibility of any organisation

• Donors reap the benefits of less taxable incomes

• Possibility of attracting more donors

• Eligibility to get government funds

• NGO owners can seek foreign contributions without many hassles

New terms of Registration and Re-registration under Section 80G and 12A :

• Newly established trusts applying for income tax registration will be given provisional registration for three years. It becomes due for renewal either upon commencement of activities or upon completion of 3 years.

• For Re-Registration, the tenure will be revalidated by income tax authorities for a period of 5 years and renewal will fall due upon completion of 5 years.